Analysis of transactions in the EUR / USD pair
Euro rose by 15 pips on Wednesday morning, thanks to the signal to buy that coincided with the MACD line being at the oversold area. Sadly, it was not followed by further growth as the indicator moved to the overbought area, which significantly limited the upward potential in the pair. But some time later, EUR / USD was able to gain another 35 pips, when the MACD line climbed up from zero. The drivers of growth were the strong statistics from the Euro area, which exceeded expectations.
But in the afternoon there was a slight fall, when the US released better-than-expected data on employment. Today, there will be another report from the Euro area, but this time it will be about inflation. An improvement in the PPI will lead to a rise in EUR / USD, while a fall will result in a decline. There will also be data on US jobless claims and foreign trade balance, which could provoke a deeper plunge if the figures exceed expectations.
For long positions:
Open a long position when euro reaches 1.1854 (green line on the chart), and then take profit at the level of 1.1888 (thicker green line on the chart). The pair will climb higher if EU inflation exceeds expectations. But before buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.1830 and 1.1795, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1854 and 1.1888.
For short positions:
Open a short position when euro reaches 1.1830 (red line on the chart), and then take profit at the level of 1.1795. A decline will occur if the Euro area releases weak data on producer prices and if the US publishes a strong labor market report. But before selling, make sure that the MACD line is below zero, or is starting to move down from it. It is also possible to sell at 1.1854 and 1.1888, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1830.
What’s on the chart:
The thin green line is the key level at which you can place long positions in the EUR/USD pair.
The thick green line is the target price, since the quote is unlikely to move above this level.
The thin red line is the level at which you can place short positions in the EUR/USD pair.
The thick red line is the target price, since the quote is unlikely to move below this level.
MACD line – when entering the market, it is important to be guided by the overbought and oversold zones.
Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.
And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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